The Government should not be ordered to pay compensation for failing to implement a European Directive which remained ambiguous. A failure to implement a directive into national law may be actionable but there would normally be only small damages. The breach here had not involved a manifest and grave disregard of European law.
LMA BT alleged improper implementation of a Directive on public procurement in the water, energy, transport and telecommunications sector. BT claimed to be financially disadvantaged and sought damages on the Francovich principle. Held: (does the case turn on discretion on implementation) the provisions of the Directive were sufficiently unclear as to justify the UK’s error. The court confirmed that ‘a restrictive approach to state liability is justified’
ECJ 1. It is not open to a Member State, when transposing into national law Directive 90/531 on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors, to determine which telecommunications services are to be excluded from its scope in implementation of Article 8(1), since that power is vested in the contracting entities themselves.
However, where a Member State has itself determined, in transposing that directive into national law, which services of a contracting entity are to be excluded in implementation of Article 8, it is not obliged under Community law to pay that entity compensation for damage suffered by it as a result of the error thus committed.
In the present case, the conditions which must be fulfilled in order for a Member State to incur liability to compensate individuals for damage caused to them as a result of a breach of Community law committed by it in the exercise of legislative functions in which it has a discretion, such as the transposition of a directive, are not wholly met. There has not been a sufficiently serious breach of Community law, since Article 8(1), which has been incorrectly transposed, is imprecisely worded and the interpretation given to it in good faith by the Member State in question, albeit erroneous, was not manifestly contrary to the wording of the directive or to the objective pursued by it.
2. In the light of its wording and purpose, the criterion which Article 8(1) of Directive 90/531 on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors lays down in order to exclude from the scope of the directive certain contracts awarded by entities providing services in the fields in question, namely that ‘other entities are free to offer the same services in the same geographical area and under substantially the same conditions’, is to be verified as a matter of law and of fact, having regard in particular to all the characteristics of the services concerned, the existence of alternative services, price factors, the dominance or otherwise of the contracting entity’ s position on the market and any legal constraints.
3. In the case of a breach of Community law for which a Member State, acting in a field in which it has a wide discretion in taking legislative decisions, can be held responsible, Community law confers on injured parties a right to reparation where three conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the injured parties.
Those conditions are applicable to the situation in which a Member State incorrectly transposes a Community directive into national law. A restrictive approach to State liability is justified in such a situation, for the reasons already given to justify the strict approach to non-contractual liability of Community institutions or Member States when exercising legislative functions in areas covered by Community law where the institution or State has a wide discretion – in particular, the concern to ensure that the exercise of those legislative functions is not hindered by the prospect of actions for damages whenever the general interest requires the institutions or Member States to adopt measures which may adversely affect individual interests.
Judges:
G.C. Rodriguez Iglesias, P
Citations:
Gazette 04-Sep-1996, Times 16-Apr-1996, C-392/93, (1996) QB 615 (ECJ), [1996] EUECJ C-392/93
Links:
Cited by:
Cited – Chester, Regina (on The Application of) v Secretary of State for Justice SC 16-Oct-2013
The two applicants were serving life sentences for murder. Each sought damages for the unlawful withdrawal of their rights to vote in elections, and the failure of the British parliament to take steps to comply with the judgment.
Held: The . .
Lists of cited by and citing cases may be incomplete.
European, Utilities
Updated: 03 June 2022; Ref: scu.161193